On Thursday 4th February, we hosted our first event as MiQ, which focused on the role differentiated natural gas can play in methane abatement efforts in the sector.
I was delighted to be joined by an outstanding collection of speakers and we were thrilled that Derek Brower, the FT’s U.S. Energy Editor, was on hand to steer us through the event.
We are particularly grateful to Professor Stern, Distinguished Research Fellow at the Oxford Institute for Energy Studies, who delivered an illuminating keynote speech, which outlined the context and scale of methane emissions in the oil and gas sector. He showed that anthropogenic methane emissions have steadily risen since 2005 and emphasised the importance of near-term methane abatement due to its global warming potential, which is 84 times that of CO2 over a 20-year timeframe. His unparalleled research over the last 20+ years has made him a leading voice on natural gas.
Professor Stern demonstrated that there is currently no single global framework for measurement, reporting, and verification (MRV) of methane emissions and argued that confidential data within the sector is the enemy of progress. He went on to say that any approach to reducing emissions should be based on persuasion rather than threats, and that he is reasonably confident that progress can be made due to economic incentives and the small number of major producers.
RMI and SYSTEMIQ came together to form MiQ because we saw the opportunity to address methane emissions from oil and gas through a market-based approach.
For years, the issue of measuring methane has been discussed by the sector. However, as the scale of the issue is becoming widely understood, the recognition of the need for greater transparency in emissions is rising. Our emissions standard and independent certification system is designed to facilitate that transparency in the market.
Deborah Gordon, Senior Fellow in Climate Intelligence at RMI, outlined the imperative to stop treating all natural gas as the same, as well as the potential for a huge near-term impact from methane abatement. Deborah’s research with other academics from Stanford University and the University of Calgary has demonstrated that there is a “tenfold difference” in the climate impact of low-emissions gas versus high-emissions gas.
Jonathan Banks, International Director of Super Pollutants at Clean Air Task Force, brought a regulatory perspective to the discussion and addressed the potential position of certification systems in relation to existing and future regulation frameworks. He stated that it is already possible to mitigate a significant majority of the emissions from oil and gas (according to the IEA 75% can be easily mitigated). Jonathan identified the regulatory challenges related to imported gas from markets with less robust regulation as the “new frontier” in managing methane emissions.
Faustine Delasalle, Director of the Energy Transitions Commission, was able to contextualize the importance of methane abatement within net zero ambitions. She said that although the market for gas will be shrinking over the next decades, there is a role for natural gas in the transition if, and only if, producers address methane emissions in the supply chain. As MiQ, we are in complete agreement with Faustine’s final point. We want to see a world powered entirely by renewables, but, until we get there, we need to make the transition as clean as possible.
With close to 250 participants, the Q&A section of the event was lively and interesting. We were delighted to see a range of questions from the audience, varying from the global trends in methane emissions to technical questions about MiQ’s verification process. Questions included:
- How will producers react to demand from buyers of imported gas for lower emissions gas? Deborah said the whole purpose of MiQ is to introduce ‘competition’ to the market. MiQ can differentiate the natural gas market, which means more competition for verified lower emissions gas.
- In MiQ’s process, who makes the assessment at the facility level? I replied that all assessments will be checked by independent, third-party auditors who have technical expertise. MiQ is not involved in auditing the process, it is providing the global framework for the assessment of methane emissions.
- Is MiQ just an excuse for business as usual in the sector? I responded that technology for methane abatement exists but currently the market is missing the necessary signals for change. Differentiated gas will create those signals. Similar signals in other energy commodity markets have informed investment decisions, such as sulfur norms in oil. We anticipate that market forces, through pressure from buyers who want to buy lower methane emissions gas, will force change. Ultimately, we hope that the MiQ system is adopted by regulators.
It was encouraging to see a high level of interest in MiQ, as well as a desire from across the energy sector to reduce emissions. This has been reflected in the conversations we have had with both producers and buyers in the U.S., Europe, and Asia. Since the webinar took place, we have been thrilled to hear enthusiastic reactions from a range of attendees.
All of us at MiQ want to extend a huge thank you to our panellists and our excellent host, as well as to all of those who watched the webinar and joined in the discussion. We are looking forward to the next phase in the development of MiQ and are keen to hear from any interested parties.